Wednesday, June 15, 2022

How To Buy Tax Forfeited Land

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If you don’t pay your property taxes by the;due date, your account will become overdue. Unpaid property taxes become delinquent after December 31 of the;current tax year;and collection action will begin.

Collection action may include:

  • Notifying the Canada Revenue Agency to set aside money owing to you
  • Registering a lien against your property or personal belongings
  • Requiring your employer to deduct money from your paycheque
  • Issuing a demand notice to your bank, credit union or trust company to pay money from your account
  • Seizing your personal belongings
  • Forfeiture of your property to the Province of British Columbia

Over the following two years, the province will take steps to collect any unpaid balances, including;transferring ownership of your property to the Province of British Columbia.

Jackson County Land Auction Begins Wednesday For Tax

JACKSON, Miss. – More than 300 tax-forfeited properties in Jackson County will be up for auction over the next month.

The Secretary of States Office will host an auction to sale the 321 state-owned properties. The online auction begins at 8am Wednesday, July 7, and will run through 11:59pm Wednesday, Aug. 4.

Its tax-forfeited properties so when individuals do not pay their taxes, theres a process by which you follow and, eventually, it ends up in the states hands, said Secretary of State Michael Watson. Our goal is to get that back on the tax rolls so that revenue can come back to the cities. Again, you want to make sure those are on the tax roles to make sure those cities arent losing that money. Weve got about 321 parcels in Jackson County.

According to Watson, there are around 100 properties in Moss Point, 100 in Ocean Springs, 50 in Gautier, and 25 in Pascagoula, as well as several in the county. In all, Watson said the properties have a tax value of $1.7 million.

Many of these are in subdivisions, youve got some that are in undeveloped areas but the vast majority of them are in subdivisions, said Watson. For instance, theres some on there I saw that have a value of about $9,000 but you can pick up for about $500. So a lot of really good deals out there on this.

Once sold, thats tax money that will go directly back to the cities and to Jackson County.

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Notice Of Public Sale Of Tax

NOTICE IS HEREBY GIVEN that the parcels of land described in the List of Tax-Forfeited Land for Public Sale which is contained herein shall be sold to the highest bidder at public sale. The sale will be governed by the provisions of Minnesota Statute 282 and by the resolution of the Otter Tail County Board of Commissioners authorizing such sale. The resolution reads as follows:BE IT RESOLVED, by the Board of County Commissioners of Otter Tail County, Minnesota, that all parcels of tax-forfeited land included on the attached list have been classified as non-conservation land; that the basic sale price of each parcel included on the attached list be approved and authorization for a public and /or private sale of this land be granted, pursuant to the Minnesota Statute 282; that the sale will be held at 9:00 a.m., Wednesday, December 16, 2015 by the Otter Tail County Auditor-Treasurer in the Otter Tail County Commissioners/Otter Tail Lake Rooms in the Otter Tail County Government Service Center, for not less than the basic sale price; and that all sales shall be for full cash payment per the terms as set forth in the Notice of Public Sale of Tax-Forfeited Lands.BE IT FURTHER RESOLVED, that the conditions and terms of the public sale shall be as described in the list contained here-in and approved by the Otter Tail County Board of Commissioners:

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How A Forfeited Real Estate Deposit Is Treated For Tax Purposes

Taxpayer signs a purchase and sale agreement to sell real estate to an unrelated buyer for $2,500,000. Buyer deposits 10% of the purchase price, or $250,000, as an earnest money deposit and as liquidated damages in the event the buyer fails to complete the purchase. The buyer subsequently fails to complete the acquisition, and the deposit is forfeited to the Taxpayer. The real estate in question was held as long-term capital property and not as inventory.

Question: How should this forfeited deposit be treated for federal income tax purposes?

Answer: A seller who retains both the earnest money deposit and the property must treat the forfeited deposit as ordinary income.

Some taxpayers have tried to argue that the forfeited deposit should either be treated as capital gain or possibly as a tax-free return of tax basis. However, courts have generally rejected these arguments.

The sole question in the case was whether or not the gain is to be treated as a sale or exchange of a capital asset. The Taxpayer contended that the sale was completed when the stock was placed in escrow. The Commissioner determined that the $75,000 which was forfeited, was ordinary income since the sale had not been completed.

The Sixth Circuit Court of Appeals, in a strikingly economical use of words, stated: We agree .Id.

Tax Liens Are Filed By The State

Second tax forfeited property auction of 2021 now open online

The process begins when the county tax assessor places a lien against a property for unpaid property taxes. The county will then sell that lien to the highest bidder at an auction. This tax lien typically has first priority for payment in the hierarchy of other encumbrances that might exist against the property, such as first or second mortgages.

As a practical matter, however, many lenders include property taxes in a homeowners monthly mortgage payments. The tax portion of each payment is escrowed, and the lender pays the government when the taxes come due. If the taxes werent paid, its likely that the homeowner hasnt been making his mortgage payments. The lender would probably respond to this situation by beginning foreclosure proceedings well in advance of the tax authorities getting involved.

Tips

  • Property can only be sold at a Texas tax lien sale when a tax lien is in place against it. In other words, a mortgage lender cant arrange for its own foreclosure after the lien has been sold.

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Payments Of Liens Mortgages And Taxes

  • Pursuant to 31 USC §9703, Department of the Treasury Forfeiture Fund, any payment made for valid liens and mortgages against property that has been forfeited shall not exceed the value of the property at the time of seizure.

  • The payment of liens, mortgages, and taxes is governed by TEOAF Directive Number 14, Expeditious Payment of Liens, Mortgages and Taxes by the Department of the Treasury. The purpose of TEOAF Directive Number 14 is to treat the payment of perfected liens, taxes, and mortgages in an expeditious manner to ensure a timely closing on property, particularly real property, and ensure a clear title for the transfer of the property.

  • The Treasury Executive Office for Asset Forfeiture Directive Number 14 lists five TEOAF policy goals:

  • Liens, mortgages, taxes and other liabilities are paid as soon as practical after forfeiture.

  • Property taxes shall be paid only up to the date of forfeiture unless statements to the contrary are contained in the court order.

  • Sales of real property should occur within three months of the date that all liens and taxes are satisfied.

  • Closing should occur within 45 days of the date of sale.

  • Gross revenues from the closing of the property should be provided to National Finance Center within five days of the date the seized property contractor receives the funds from the escrow agent.

  • 9.7.8.8.1

    Payment of Liens on Motor Vehicles to be Sold

    9.7.8.8.2

    Disposition of Properties Subject to Title Restrictions

    9.7.8.9

    Time Limits For Redemption

    Joe would have to redeem within six months if the property isn’t legally considered his homestead, or primary residence, or if its not agricultural property. Otherwise, he has two years to redeem. The deadline for commercial property is six months. Mary cant claim ownership or offer the property for sale until after the appropriate redemption period has expired.

    Its also possible that Joe can pull the property by paying the taxes due before the tax lien is actually put up for bids at a Texas tax lien auction.

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    Remission Of Forfeited Property To Owners Lienholders Or Victims

  • The Deputy Director, Operations Policy and Support, has the authority to grant petitions for remission or mitigation of forfeited property filed with CI in administrative forfeiture actions. The Attorney General has the authority to grant petitions for remission or mitigation of forfeited property submitted in civil judicial and criminal forfeiture actions. The remission or mitigation of forfeited property and quick release of seized property is covered in IRM 9.7.7, Claims and Petitions.

  • 9.7.8.14

    Buy Land From The State

    TFL is Tax Forfeited Land

    The state of Florida owns and oversees management of approximately 3.8 million acres of uplands . Most of the land is actively used by state agencies for recreation or conservation purposes, which are protected by the Florida Constitution in perpetuity.

    A small percentage of lands are available as surplus, most of which are Murphy Act Lands, small parcels of land scattered across Florida. These surplus parcels consist of small parcels that the state acquired as a result of the Murphy Act. The Murphy Act provided for statutory forfeiture of lands for nonpayment of taxes. Tax certificates unredeemed as of June 9, 1939, were automatically converted to fee simple title in the name of the state. Most of the Murphy Act parcels have already been sold or are managed for conservation or other uses.

    Before a building or parcel of land is offered for lease or sale to a local or federal unit of government or a private party, it shall first be offered for lease to state agencies, state universities;and the Florida College System institutions, with priority consideration given to state universities and Florida College System institutions.

    These transactions are processed by DEP’s Division of State Lands Bureau of Real Estate Services’ Disposition section.

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    Department Of Justice Asset Forfeiture Fund

  • As part of the Comprehensive Crime Control Act of 1984, Congress established the Department of Justice Asset Forfeiture Fund, into which forfeited cash and proceeds from the sale of property forfeited by a Justice agency are to be deposited. The Department of Justice Asset Forfeiture Fund is subject to most of the same restrictions as the Treasury Forfeiture Fund. Refer to the Department of Justice Asset Forfeiture Policy Manuals at www.usdoj.gov/criminal/publicdocs/11-1prior/crm04.pdf.

  • When Are Forfeiture Auctions Held

    There isn’t a set schedule for auctions. We will post sale information and property descriptions when available on this page. In addition, a notice will be published in the Chisago County Press and ECM-Post Review approximately 20 days prior to the sale for 2 consecutive weeks.

    You may also subscribe to the Notify Me module at the bottom of this page.

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    Ms 429071 Subd 4 Reassessment Tax Forfeited Land

    When a parcel of tax forfeited land is returned to private ownership and the parcel is benefited by an improvement for which special assessments were cancelled because of the forfeiture, the municipality that made the improvement may, upon notice and hearing as provided for the original assessment, make a reassessment or a new assessment as to the parcel in an amount equal to the amount unpaid on the original assessment.

    How To Buy Tax Forfeited Land In Minnesota

    Jasper to acquire tax

    Minnesota is generally not in the business of buying and selling land. However, on occasion, it becomes necessary for the state to foreclose on land when owners do not pay property taxes or other lawful tax debts owed to the government. When this happens, Minnesota state law requires that the county where the tax-forfeited land is located, put the property up for sale through a public auction. In Minnesota, bidding on and purchasing tax-forfeited land is a simple and transparent process.

    Contact the Land Commissioners Office in the county where you would like to purchase land. Ask when upcoming tax-forfeited land auctions will occur. Request that the Land Commissioners Office place you on its mailing list for updates about land available for sale at tax auctions.

    Contact the Division of Property Records and Taxation in the county where the land is located. Request a Sealed Bid Form and ask that the department mail it to you.

    Enter your name, address and telephone number on the Sealed Bid Form. Sign the form. Place the Sealed Bid Form in an envelope and mark it Land Sale Bid. Return the form or mail it to the Division of Property Records and Taxation.

    Go to the County Board room of the county where the public auction occurs at the date and time scheduled for the event. Observe the opening of the sealed bids to determine if yours was the winning offer for the parcel. Alternatively, wait for the county board to contact you by mail if your bid was accepted.

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    The Possibility Of Redemption

    As for Joe Homeowner, he retains the right to redeem, or buy, the tax lien back from Mary. But its not just a matter of handing her $10,000, the amount of the past due taxes she has paid; Joe also will have to pay some pretty steep interest.

    Under Texas law, Joe will owe Mary 25 percent interest if he redeems the lien and the property within a year, plus any accrued costs and fees paid by her. These costs do not include costs that Mary might have voluntarily taken on, such as improvements and repairs that arent required by ordinance.

    The interest rate doubles to 50 percent, plus costs and fees in the second year. At a minimum, Joe would owe Mary $12,500, plus costs, if he managed to redeem the property within 12 months, and he loses the right to live on the property unless and until he redeems it.

    Where And How It Works

    A tax lien sale is a method many states use to force an owner to pay unpaid taxes. It gives homeowners a chance to pay those taxes along with high penalty fees. Twenty-nine states, plus Washington, DC, the Virgin Islands, and Puerto Rico allow tax lien sales.

    Each state uses a slightly different process to perform tax lien sales. A;typical process works like this:

    • A property owner neglects to pay his or her;taxes.
    • A waiting period initiates. State laws vary on the waiting time before the tax collectors intervene; it;can range from a few months to a few years.
    • The unpaid taxes are auctioned off at a tax lien sale.
    • The highest bidder gets the lien against the property.
    • The tax collector uses the money earned at the tax lien sale to compensate for unpaid back taxes.
    • The homeowner has to pay back the lien holder, plus interest, or face foreclosure.

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    If I Pay Back Taxes On A Property Do I Own It

    When you buy a tax lien certificate, you’re buying the right to receive a debt payment, not the deed to the house. The homeowner is still the legal owner of the home. If he does not pay the tax debt, then you can foreclose. But you cannot buy a tax lien, turn around and foreclose on the property the next day.

    In every jurisdiction, homeowners are allowed a redemption period anywhere between three months and three years to repay the amount you paid for the certificate plus interest and penalties. It’s only after the redemption period is up that you can file a foreclosure proceedings lawsuit to take ownership of the property. That rarely happens since the vast majority of tax liens are paid before the redemption date.

    Here’s an example. Let’s say a homeowner is delinquent on their taxes in the sum of $3,000 and you’ve bid a 10 percent interest rate. The state also charges a $50 penalty every 6 months. You acquire the tax lien and hold it for 12 months until the owner pays off the $3,000 debt. Your earnings consist of interest at $300 and $100 in penalty income . The total interest earned is $400 against a $3,000 investment. That’s a win if your goal is to get your investment capital back plus a decent rate of interest. But if your goal is to buy real estate at knock-down prices, you’re going to be out of luck when the homeowner pays up.

    Disposition Of Funds On Deposit In The United States Treasury Suspense Account Or Treasury Forfeiture Fund

    Tax Forfeited Land
  • The Treasury Executive Office for Asset Forfeiture , issued TEOAF Directive Number 4, Seized Cash Management Policy, to allow the Treasury Forfeiture Fund to more efficiently and effectively control the disposition of funds deposited into the Treasury Suspense Account and/or the Treasury Forfeiture Fund. Directive Number 4 instructs all participating Treasury Forfeiture Fund law enforcement agencies to use standard forms to initiate the disposition of funds held in the Treasury Suspense Account, request post forfeiture refunds, and issue instructions for the disposition of cost bonds where there are outstanding cost bonds from forfeitures prior to the Civil Asset Forfeiture Reform Act of 2000. These forms serve as authorizing and control documents to effect the required action.

  • 9.7.8.3.1

    Disposition Instructions for Currency Held in the Treasury Suspense Account

  • Seized currency, financial accounts, and financial instruments deposited into the Treasury Suspense Account must be transferred to the Treasury Forfeiture Fund upon forfeiture. The TEOAF Form #2, Disposition Instructions for Currency Held in Customs Suspense Account , is used to initiate the transfer of funds that have been forfeited from the Customs Suspense Account to the Treasury Forfeiture Fund -Warrants and Forfeiture mailbox.

  • 9.7.8.3.2

    Request for Post Forfeiture Refund

    9.7.8.3.3

    Cost Bond Disposition Instructions

    9.7.8.4

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